Mortgage application accepted then declined :/

internationalhardman

Hi guys.... so here goes.

I recently left the armed forces and have managed (by miracle) to find employment that offers a much, much better salary and benfits package. The only problem with the new job is that it is an hour away from my current home (living with folks)

So.... a couple of months ago I found a property I liked ten minutes drive away from work and then began looking for a suitable mortgage. Now, I know getting a mortgage at the moment is very difficult for everybody... In my teens I was no angel with credit but since being in my 20's (29 now) I have tried the best I can to be a good boy. Anyway... first I tried Nationwide and the answer was no. I then tried two or three others all with negative decisions. I thought I would have one final bash at it through a mortgage broker who had been recommended by a friend and I was accepted by RBS. One problem though, they wanted 25% deposit (£23,750) I had already got a decent deposit (including 5% thrown in from the builder) but I just didn't have the money to stretch to 25%. I then noticed that RBS were doing much better mortgage rates and only 10% deposit deals for walk in customers so I set about getting a mortgage with them direct... after my best efforts and a week of them umming and arrring they said no :mad:

Okay so being stuck my father took pity on me and said together we can make up the 25% :jso I rang the broker back to confirm that the offer in principle was still valid which after a phonecall to rbs she said it was.... happy days.

I went and paid the £500 non refunable reservation fee on the property I wanted in fear that someone else may snap it up from under my nose and the formal mortgage application was subbmitted over the weekend :beer:

All was going well till I got a call this morning saying that the application had come back declined :mad::mad::mad: after some harsh words were exchanged my broker eventually got a call back from RBS so she could explain my situation. They are willing to look at the application again but I need to send in a copy of my credit report from experian.

Why did they give me an offer in principle only to refuse my application further on down the line? Surely they are not such a mickey mouse operation? I have applied for my credit file online tonight but I know it will take 7 days + to come though... what are they going to glean from my credit file that they cannot see already? I know I am not on the voters roll but I have filled the forum in to go on it and will be on by August. I'm really furious that they would do such a thing. Any help or advice anyone? :mad::mad::mad::mad::mad::mad:

herbiesjp

Because when RBS do an agreement in principle they do not do the credit search

That is only done at the time of application.

internationalhardman

herbiesjp wrote: »

Because when RBS do an agreement in principle they do not do the credit search

That is only done at the time of application.

But why? Surely that isn't very responsible and leads people into a false sense of hope!

herbiesjp

Not if you are advised beforehand that this is the case.

Conrad

I've had a couple of cases declined well into the process recently, indeed one had a full written mortgage offer!

People don't seem to have grasped the impact this credit crunch is having.

The slightest risk factor will likely lead to a decline now.

Lenders can afford to turn away all but the very best cases as there is far more demand than supply.

Best of luck

clairehi

internationalhardman wrote: »

I know I am not on the voters roll but I have filled the forum in to go on it :mad::mad::mad::mad::mad:

Did the broker not ask you about this? Surely this is the most likely problem.

Mini_Bear

Also the more declines u have for a mortgage the higher the likelihood u will be declined on new mortgage applications. banks share the info and the search shows on ur credit file.
my advise wud be keep save hard, wait until you are on the voters roll and try to clean up ur credit file sum more if poss.
i used to hav a 2hr commute to work and then 2 hrs bak. i did that for 3 yrs living at my folks. an hr wont kill u and will give u a better financial position in the long run. annoyin i kno but it wont b 4ever.

internationalhardman

Thanks for all the replies so far. Have now applied for a copy of my credit file from experian so we (myself and the mortgage broker) can see whats going on and decide the best route from there. One option may be a sub prime mortgage with a higher rate but less strict crtieria for the credit score (affordability is not an issue in the slightest)

Anyone have any experience (good or bad) with these types of mortgages?

luckyfool

Not strictly correct, RBS do a credit search at aip stage, and the case is credit scored at that point. Unfortunately their system does not check adverse credit data against their criteria so a case can get a high enough score to pass, even if there is something on the credit report that would automatically mean a decline. It's only once their human underwriter looks at it later that they pick up on the adverse information and decline the case.

Sub Prime at 75% is possible on new build houses, though I suspect the lender offering the better rates will not allow you to use a builder deposit.

internationalhardman

luckyfool wrote: »

Not strictly correct, RBS do a credit search at aip stage, and the case is credit scored at that point. Unfortunately their system does not check adverse credit data against their criteria so a case can get a high enough score to pass, even if there is something on the credit report that would automatically mean a decline. It's only once their human underwriter looks at it later that they pick up on the adverse information and decline the case.

Sub Prime at 75% is possible on new build houses, though I suspect the lender offering the better rates will not allow you to use a builder deposit.

Thank you for the clarfication... I wish I had been better informed.

As for not using the builders deposit, I was having to do that anyway for RBS taking the builders deposit of 5% off the purchase price and still having to come up with 25% (£23,750) which is sitting in my bank ready.

emmalita

does anybody know if halifax do credit checks at AIP stage i thinkthey do if i can remember rightly